Correlation Between GlaxoSmithKline PLC and Shelton International
Can any of the company-specific risk be diversified away by investing in both GlaxoSmithKline PLC and Shelton International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GlaxoSmithKline PLC and Shelton International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GlaxoSmithKline PLC ADR and Shelton International Select, you can compare the effects of market volatilities on GlaxoSmithKline PLC and Shelton International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GlaxoSmithKline PLC with a short position of Shelton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of GlaxoSmithKline PLC and Shelton International.
Diversification Opportunities for GlaxoSmithKline PLC and Shelton International
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GlaxoSmithKline and Shelton is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding GlaxoSmithKline PLC ADR and Shelton International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelton International and GlaxoSmithKline PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GlaxoSmithKline PLC ADR are associated (or correlated) with Shelton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelton International has no effect on the direction of GlaxoSmithKline PLC i.e., GlaxoSmithKline PLC and Shelton International go up and down completely randomly.
Pair Corralation between GlaxoSmithKline PLC and Shelton International
Considering the 90-day investment horizon GlaxoSmithKline PLC is expected to generate 6.05 times less return on investment than Shelton International. In addition to that, GlaxoSmithKline PLC is 1.73 times more volatile than Shelton International Select. It trades about 0.0 of its total potential returns per unit of risk. Shelton International Select is currently generating about 0.03 per unit of volatility. If you would invest 2,176 in Shelton International Select on August 26, 2024 and sell it today you would earn a total of 202.00 from holding Shelton International Select or generate 9.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GlaxoSmithKline PLC ADR vs. Shelton International Select
Performance |
| Timeline |
| GlaxoSmithKline PLC ADR |
| Shelton International |
GlaxoSmithKline PLC and Shelton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GlaxoSmithKline PLC and Shelton International
The main advantage of trading using opposite GlaxoSmithKline PLC and Shelton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GlaxoSmithKline PLC position performs unexpectedly, Shelton International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shelton International will offset losses from the drop in Shelton International's long position.| GlaxoSmithKline PLC vs. Novartis AG ADR | GlaxoSmithKline PLC vs. AstraZeneca PLC ADR | GlaxoSmithKline PLC vs. Roche Holding Ltd | GlaxoSmithKline PLC vs. Bristol Myers Squibb |
| Shelton International vs. Baron International Growth | Shelton International vs. Shelton International Select | Shelton International vs. Davis International Fund | Shelton International vs. Blackrock Intl A |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |